All organisations have, consciously or otherwise, an employer brand. It's the way in which organisations differentiate themselves in the labour market, enabling them to recruit, retain and engage the right people. A strong employer brand helps businesses compete for the best talent and establish credibility. It should connect with an organisation’s values and must run consistently through its approach to people management.

This factsheet looks at why employer brand is important, how technology and social media are affecting employer brand, and its particular importance in recruiting talent, and mergers and acquisitions. It outlines the benefits of having a strong brand and the stages of developing one. Finally, it discusses the organisation’s employee value proposition and the idea of segmenting that proposition for different employee groups.

CIPD viewpoint

Employer branding is a useful tool to help organisations differentiate what they offer in the labour market, and recruit, retain and engage the people they need to succeed. Just as marketing professionals seek to understand their customers, HR professionals will benefit from gaining ‘employee insight’ through methods such as attitude surveys and focus groups. This insight should inform the HR strategy, influence how internal communications are handled and help the design of effective people management initiatives.

Employer branding presents HR professionals with an opportunity to learn from marketing techniques and apply them to their work. It’s important that HR works collaboratively, for example with colleagues in marketing, public relations, internal communications and corporate responsibility, to share expertise and reap maximum benefits from developing an employer brand.

The popularity of social media makes for enhanced risk for organisations and their HR teams due to the ease with which prospective or current employees can share negative opinions. To counteract this, HR teams should increase their awareness and understanding of the value of transparency about the experiences of individuals working in their organisation. This requires continued attention and understanding of the strength, quality and ’health’ of the employer brand in the labour market.

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All organisations need to understand what their employees, stakeholders and customers think of them. Marketing professionals have developed techniques to help attract customers, communicate with them effectively and maintain their loyalty to a consumer brand. Employer branding involves applying a similar approach to people management and describes how an organisation markets what it has to offer to potential and existing employees.

Our 2008 guide, Employer branding: a no-nonsense approach, defines an employer brand as '...a set of attributes and qualities, often intangible, that makes an organisation distinctive, promises a particular kind of employment experience, and appeals to those people who will thrive and perform best in its culture'.

A strong employer brand should connect an organisation’s values, people strategy and HR policies, and be linked to the company brand. A key part of an organisation’s culture and values are the ethical standards that the employer upholds through the practice of its employees. Employer brand is therefore influenced by the ethical perspective that prospective and current employees take, as well as through business actions.

The concept of employer branding has become prominent in recent years. Our 2007 research Employer branding: the latest fad or the future of HR? identified four main reasons for this: brand power, credibility, employee engagement and the prevailing labour market conditions.

In the last two decades, ‘branding’ has become a central concept in organisational and social life. Many HR professionals have embraced the language and techniques of branding to help enhance their strategic influence and credibility and although the recruitment proposition was their starting point, today many recognise the value of a branding approach to the whole employee lifecycle as they seek to build an engaged workforce.

Is employer brand still a relevant concept?

Employer branding remains relevant in uncertain economic times and particularly in a marketplace where there are skill shortages and organisations competing for talent. Our Talent and changing values ‘thought piece’ (part of our Talent Forward series) also highlights an increasing desire for individualism and less trust and loyalty to organisations, (particularly among younger employees) which presents an important challenge. More on employees' attitudes to work, levels of engagement and job satisfaction in our UK Working Lives survey.

The popularity of social media is emphasised in our report Social technology, social business?. Its use is only going to increase and this underlines the importance of continued attention to the employer brand. Although people have been more likely to use social media in their personal rather than their professional lives, this is rapidly changing. Organisations need to be particularly aware of both the positive and negative feedback that can be given by past or present employees on social media. Organisations should monitor and act where necessary.

Employer branding and mergers and acquisitions

Mergers and acquisitions have a particularly significant impact on the brand and shake the ‘deal’ which exists between the individual and their employer. Many employees are disempowered and may feel they are working in a job they did not pick, for an organisation they did not choose to work for.

Organisations can use an employer brand to help them compete effectively in the labour market and drive employee loyalty through effective recruitment, engagement and retention practices.

All organisations have an employer brand, regardless of whether they have consciously sought to develop one. Their brand will be based on the way they are perceived as a ‘place to work’, for example by would-be recruits, current employees and those leaving the organisation.

To be effective, the brand should not only be evident to candidates at the recruitment stage, but should inform an organisation's approach to people management. For example, the brand can inform how the business tackles:

induction

performance management and reward

managing internal communications

promoting effective management behaviours

people leaving the organisation.

To deliver benefits, it is important that the employer brand is not merely rhetoric espousing the organisation’s values, but is reflective of the actual experience of employees. As our Guide on employer branding points out "People who like the job they do and the place they work become advocates for it".

An employer brand approach involves research with employees to understand their attitudes and behaviour, for example, through a staff attitude survey. This employee insight data can inform metrics on ‘people performance’ in the organisation, providing an opportunity to demonstrate links to organisation performance. Organisations could choose to monitor their employee brand through quantitative data such as number of applications for roles, acceptance of offers, employee engagement scores, reduction in costs or they could choose to monitor more qualitative feedback. Organisations should be able to answer questions on ‘what sets them apart from their competitors’.

applying the brand to the organisation’s website and social media communications.

Measurement, maintenance and optimisation - concerned with checking progress and maintaining momentum. This could include:

probing internal and external response and perception of the new brand

measuring improvements in the recruitment and retention metrics

measuring uptake in terms of actions that demonstrate the business is ‘living the brand’.

Developing an employer brand requires important consideration of ethical practice, particularly in the development and optimisation of engagement with current and future potential HR professionals. Find out more in our factsheet on Business ethics and the role of HR.

The employee value proposition describes what an organisation stands for, requires and offers as an employer. There is evidence of the influence of the psychological contract as the proposition represents the ‘deal’ between employer and employee.

Rather than focussing on a single value proposition for the whole organisation, some organisations are beginning to take a more segmented approach. Employee segmentation is driven by the recognition that employees, like customers, are not a homogenous group. It can be beneficial to tailor the ‘deal’ or value proposition to the needs of a diverse workforce – and this can mean emphasising different elements of the value proposition to different groups of employees or creating subsets of the overall value proposition.

It is possible to segment an organisation’s workforce in many different ways. In the past organisations have analysed employee satisfaction or engagement data in terms of location and job type, but valuable insights can be gained from segmenting your workforce based on categories such as age, lifestyle and attitudes to communication in the organisation. Organisations use such approaches, for example, to help them communicate and promote ‘flexible benefits’ packages reflecting the various interests and needs of different parts of the workforce. Some are now moving on to using segmented reward approaches for different segments of an organisation’s workforce, for example: sales, executives, call centres, technical support, and so on, in terms of base, variable pay, benefits and non-financial reward polices.

Whether to promote a single employer brand (and value proposition) is also a consideration for international organisations. For example, while they may wish to create global brand values, there might need to be some local interpretation of these to cater for the diversity of cultural needs locally.

CIPD members can use our online journals to find articles from over 300 journal titles relevant to HR.

Members and People Management subscribers can see articles on the People Management website.

This factsheet was last updated by Edward Houghton.

Edward Houghton: Acting Head of Research

Edward Houghton is the acting Head of Research at the CIPD. Since joining the institute in 2013 he has been responsible for leading the organisation's human capital research work stream exploring various aspects of human capital management, theory and practice; including the measurement and evaluation of the skills and knowledge of the workforce. He has a particular interest in the role of human capital in driving economic productivity, innovation and corporate social responsibility. Recent publications have included “A duty to care? Evidence of the importance of organisational culture to effective governance and leadership” for the Financial Reporting Council’s Culture Coalition, and “A new approach to line manager mental well-being training in banks” an independent evaluation of the Bank Workers Charity and Mind partnership to deliver mental health awareness training in the UK financial services sector.